{"id":88545,"date":"2020-10-14T00:13:00","date_gmt":"2020-10-13T21:13:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fidelity-makes-it-clear-bitcoin-volatility-is-worth-the-risk-for-institutions\/"},"modified":"2020-10-14T00:13:00","modified_gmt":"2020-10-13T21:13:00","slug":"fidelity-makes-it-clear-bitcoin-volatility-is-worth-the-risk-for-institutions","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fidelity-makes-it-clear-bitcoin-volatility-is-worth-the-risk-for-institutions\/","title":{"rendered":"# Fidelity makes it clear: Bitcoin volatility is worth the risk for institutions"},"content":{"rendered":"

“# Fidelity makes it clear: Bitcoin volatility is worth the risk for institutions <\/strong>”<\/p>\n

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In a recently released report<\/a> titled Bitcoin Investment Thesis<\/em>, Fidelity Digital Assets demonstrated how portfolio managers could increase their returns by allocating a portion of their holdings to Bitcoin (BTC). The report also speculated that in the near future, increased institutional interest could expand Bitcoin\u2019s market capitalization by hundreds of billions of dollars.<\/p>\n

\"Fidelity<\/p>\n

Source: Fidelity Digital Assets<\/a>.<\/em><\/p>\n

To support its thesis, Fidelity simulated sample portfolios starting with a default allocation of 60\/40 between equities and fixed income instruments. They then diversified these with Bitcoin at a rate of 1 to 3 percent. In every scenario considered by Fidelity, portfolios holding higher Bitcoin allocations outperformed their less diversified counterparts.<\/p>\n

Related News<\/a>:\u00a0Fidelity says “there is almost no relationship between the returns of Bitcoin and other assets”<\/em><\/strong><\/p>\n

Assets that are negatively correlated or exhibit low correlations with the rest of the market provide additional benefits to portfolio managers. They allow for a reduction in volatility without having to sacrifice returns. Simulated portfolios that continued to hold Bitcoin benefited from the asset\u2019s low correlation with traditional assets. The report acknowledged, however, that the increasing adoption of Bitcoin by the financial industry may lead to greater correlation in the future, thus reducing diversification benefits.<\/p>\n

Related News:\u00a0Retail investors will \u2018undoubtedly\u2019 move to Bitcoin, says Fidelity<\/strong><\/em><\/p>\n

Fidelity\u2019s report additionally estimated the potential redistribution of investments from alternative investments and fixed income to Bitcoin. The former\u2019s market is valued at $13.4 trillion, thus if Bitcoin were to capture 5% of this market, its market cap would increase by $670 billion. If it were to capture 10%, the market cap would increase by $1.3 trillion. The bond market is app<\/a>roximately worth $50.3 trillion. If Bitcoin were to capture 1% of that market, this would translate into another $500 billion.<\/p>\n

Ever-decreasing bond yields, the report argues, could push asset managers further toward alternative assets.\u00a0If the most optimistic forecasts were to materialize, Bitcoin\u2019s capitalization could increase to $2 trillion.<\/p>\n<\/div>\n

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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“# Fidelity makes it clear: Bitcoin volatility is worth the risk for institutions ” In a recently released report titled Bitcoin Investment Thesis, Fidelity Digital Assets demonstrated how portfolio managers could increase their returns by allocating a portion of their holdings to Bitcoin (BTC). The report also speculated that in the near future, increased institutional…<\/p>\n","protected":false},"author":1,"featured_media":88546,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/storage\/uploads\/view\/2a864effd95c202d8d30be76c5b51ee4.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74894,73711],"class_list":["post-88545","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-blockchain","tag-investments"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/88545","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=88545"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/88545\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/88546"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=88545"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=88545"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=88545"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}